Saudi Arabia will pump billions into the largest professional golf organization in the world to cement a merger between the US-based PGA Tour and its LIV Golf breakaway.
Saudi Arabia’s use of state funds funded by oil to fund sports shows how it has pushed into the global sport scene.
Yasir Al-Rumayyan and Jay Monahan, commissioner of the PGA Tour and head of Saudi Arabia’s sovereign wealth fund respectively, announced the deal on February 2, saying that a peace unlikely between their two organizations was brokenred over meals and rounds of Golf in London.
In the agreement, Riyadh Public Investment Fund and PGA Tour have agreed to form a joint-managed entity that will house their commercial operations. They also intend to end their pending litigation. The current European Tour, also known as DP World Tour has signed on to the deal.
LIV Golf from Saudi Arabia, which spent millions to entice top golfers like Brooke Koepka and Dustin Johnson, to join their breakaway league will also be a part of the new entity.
The deal is a shocking resolution to a dispute which divided professional men’s golf. Players who joined the Saudi-backed League were barred from participating at PGA Tour and DP World Tour tournaments.
In California, the US government launched a federal investigation into the PGA Tour. Meanwhile, the PGA Tour is suing LIV in a California federal court. Rummayan was ordered by a US court earlier this year to give a deposition in the litigation to explain PIF’s involvement in the creation of the rebel golf tour.
“As we competed over the past couple of years. . . Monahan said, “I think it’s fair that we could not have imagined getting to this point.”
He continued: “We couldn’t be more excited about the possibilities here.” We are looking forward to the people, fans, and players holding us to account in the future.”
The news of Saudi Arabia’s multi-billion dollar cash contribution comes amid reports that the country wants to attract top footballers like Karim Benzema or Lionel Messi into its domestic league.
The Saudi government has transferred the majority of its holdings in four Saudi soccer teams to PIF this week. This fund already owns Premier League club Newcastle United in England. The $650bn sovereign fund of the Kingdom will be a key factor in the future direction and development of golf.
Monahan will be the chief executive of the combined entity. Rumayyan, however, will serve as the chairman of the board. The PGA Tour will still have the majority of voting rights, but the combined entity will be governed by the PGA Tour.
We should not work against eachother.
Rumayyan will sit on the PGA Tour policy board and said that golf is integral to Saudi ambitions for sport as Riyadh pushes reforms to reduce the dependence of the Kingdom on oil.
Former US President Donald Trump, who hosted LIV competitions on his courses, described the deal as “a BIG, BEAUTIFUL AND GLAMOROUS DEALER FOR THE WONDERFUL World of Golf”.
The PGA will work with PIF to create a joint commercial entity that has yet to be named, and PIF is expected make a significant minority investment. The stake’s value and details are yet to be determined. PIF, however, will have the exclusive right of first refusal for any future capital commitments.
The cash injection from PIF will be calculated by subtracting the value of LIV’s stake from the total value for the golf enterprise. The final amount of cash contribution has not been determined and may be more or less than $3bn, depending on the value of the entire transaction.
Over two months, the PGA and PIF met in the US and Europe as well as the Middle East to negotiate the framework agreement. Monahan once claimed that the PGA focused on “legacy and not leverage” but told the FT Tuesday that he started to trust Rumayyan after “10 minutes of sitting down with him at Venice”.
The LIV Tour began its tournament schedule in London a year before. The LIV Tour launched its tournament schedule in London a year ago.
The team-based format of the Indian Premier League was inspired by Formula One racing and other newer competitions, such as the Indian Premier League. This has been a driving force for cricket ever since its inception in 2008.
Rory McIlroy was one of the most prominent stars who sided with the PGA. Tiger Woods, who had previously claimed that LIV was a “dead water,” later walked back those remarks.
The US PGA Tour, the DP World Tour and any players that joined LIV were immediately banned. This was due to the poor human rights record of Saudi Arabia and the murder by Saudi agents of journalist Jamal Khashoggi.
The tours said that they also intended to create a pathway for players to reapply to join LIV Golf if they had previously left the US or European circuits.